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Microlesson · 5-min read

Effect of Registration / Incorporation

# Effect of Registration (Sec. 9)

## The doctrine in one line

From the date of incorporation shown in the Certificate of Incorporation, a separate legal entity — distinct from its members — comes into existence and continues regardless of changes in membership.

## 1. Birth of a Body Corporate

From the date of incorporation:

  • The subscribers to the MOA AND all persons who later become members are constituted as a body corporate.
  • The body corporate operates under the name specified in the MOA.

## 2. Powers Acquired (Perpetual Succession + Capacity)

The company can perform all functions of an incorporated company with perpetual succession, including:

PowerPractical meaning
Acquire, hold and dispose of propertyMovable, immovable, tangible, intangible
Enter into contractsIn its own name
Sue and be suedIn its incorporated name

## 3. Key Consequences (Salomon principle)

1. Separate legal personality — distinct from shareholders/directors.

2. Perpetual succession — death, insolvency or insanity of any member does not affect the company.

3. Common seal / authorized signatory.

4. Limited liability for limited companies.

5. Transferable shares (in companies limited by shares).

## 4. The Certificate is Conclusive

The Certificate of Incorporation is conclusive evidence that the company is duly registered.

Worked example

### Example 1

Q. XYZ Ltd. was incorporated on 1st April 2026. Two original subscribers transferred all their shares on 1st June 2026. Does the company continue?

A. Yes. The company is a body corporate with perpetual succession under Sec. 9. Change in membership has no effect on its existence.

### Example 2

Q. A creditor wishes to sue XYZ Ltd. for an unpaid bill. Should he sue the directors personally?

A. No. Under Sec. 9, the company can sue and be sued in its own incorporated name. Directors are not personally liable for the company's debts (subject to lifting of corporate veil exceptions).

⚠️ Common exam mistakes

  • Treating a company as the same legal person as its shareholders.
  • Believing death of all original subscribers ends the company — perpetual succession means it continues.
  • Stating the company can only sue/be sued through directors — it sues and is sued in its own name.
Bare-Act text Section 9 · Companies Act, 2013 · click to expand
Sec. 9: From the date of incorporation mentioned in the certificate of incorporation, such subscribers to the memorandum and all other persons, as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name.
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